On February 20, 2003, the NRC Region IV Office of Investigations (OI)
concluded an investigation of your licensed activities at the Williston
Basin Interstate Pipeline Company field location in Whitewood, South Dakota.
The investigation reviewed activities conducted under the General License
pursuant to 10 CFR 150.20 as they relate to radiation safety and compliance
with the Commission's rules and regulations and with the conditions of
the license. A final telephonic exit briefing was conducted with you on
April 23, 2003. The enclosed report presents the results of this investigation.

During the April 23rd telephonic exit briefing, you were informed
that the NRC was considering escalated enforcement action for an apparent
violation involving a failure to file NRC Form 241, "Report of Proposed
Activities in Non-Agreement States, Areas of Exclusive Federal Jurisdiction,
or Offshore Waters," with the NRC prior to conducting licensed activities
in NRC jurisdiction. Additionally, you were informed that NRC believed
it had sufficient information regarding the apparent violation and your
corrective actions to make an enforcement decision without the need for
a predecisional enforcement conference or a written response from you.
You indicated that C&J Nondestructive Testing (C&J) did not believe
that a predecisional enforcement conference or written response was needed.

Therefore, based on the information developed during the inspection,
the NRC has determined that a violation of NRC requirements occurred.
The violation is described in the enclosed Notice of Violation (Notice),
and involves your failure to file NRC Form 241, with the NRC prior to
conducting licensed activities in NRC jurisdiction. While the NRC did
not conclude that willfulness was associated with the violations, the
NRC still considers this type of violation important because it prevents
the NRC from conducting inspections at temporary jobsites to ensure that
licensed radioactive material is being used safely and in accordance with
NRC regulations. Therefore, this violation has been categorized in accordance
with the General Statement of Policy and Procedure for NRC Enforcement
Actions (Enforcement Policy), NUREG-1600, dated May 1, 2000, at Severity
Level III. The current Enforcement Policy is included on the NRC's
Web site at www.nrc.gov; select What
we Do, Enforcement, then Enforcement Policy.

In accordance with the Enforcement Policy, a civil penalty with a base
value of $6,000 is considered for a Severity Level III violation. Because
your facility has not been the subject of escalated enforcement action,
the NRC considered whether credit was warranted for Corrective Action
in accordance with the civil penalty assessment process in Section VI.C.2
of the Enforcement Policy. Based on your prompt actions to address the
violation, the NRC has determined that you are deserving of corrective
action credit. C&J's corrective actions included filing NRC Form 241
upon the realization they had failed to file, and changing company procedures
by carrying to each jobsite additional NRC Form 241s so that C&J can
file from any location prior to conducting radiographic operations.

Therefore, to encourage prompt and comprehensive correction of violations,
and in recognition of the absence of previous escalated enforcement action,
I have been authorized, after consultation with the Director, Office of
Enforcement, not to propose a civil penalty in this case. However, you
are on notice that significant violations in the future could result in
a civil penalty. In addition, issuance of this Severity Level III violation
constitutes escalated enforcement action that may subject you to increased
inspection effort.

In accordance with 10 CFR 2.790 of the NRC's "Rules of Practice," a copy
of this letter, its enclosures, and your response (if any) will be made
available electronically for public inspection in the NRC Public Document
Room or from the NRC's document system (ADAMS), accessible from the NRC
Web site at http://www.nrc.gov/reading-rm/adams.html.
To the extent possible, your response (if any) should not include any
personal privacy, proprietary, or safeguards information so that it can
be made available to the public without redaction.

During an NRC investigation conducted on January 22, 2003, one violation
of NRC requirements was identified. In accordance with the "General Statement
of Policy and Procedure for NRC Enforcement Actions," NUREG-1600, the
violation is listed below:

10 CFR 150.20(a) provides in part that any person who holds
a specific license from an Agreement State is granted an NRC general license
to conduct the same activity in non-Agreement States provided that the
provisions of 10 CFR 150.20(b) have been met.

10 CFR 150.20(b)(1) requires, in part, that any person engaging
in activities in non-Agreement States shall, at least 3 days before engaging
in each such activity, file an NRC Form-241, "Report of Proposed Activities
in Non-Agreement States," with the Regional Administrator of the appropriate
NRC regional office.

Contrary to the above, C&J Nondestructive Testing failed
to, at least 3 days before engaging in each such activity, file a NRC
Form-241, "Report of Proposed Activities in Non-Agreement States", with
the Regional Administrator of the appropriate NRC regional office. Specifically,
on September 5, 2002, C&J Nondestructive Testing conducted radiographic
operations at the Williston Basin Interstate Pipeline Company field location
in Whitewood, South Dakota, prior to filing NRC Form 241.

This is a Severity Level III violation (Supplement VI).

The NRC has concluded that information regarding the reason for the violation,
the corrective actions taken and planned to correct the violation and
prevent recurrence, and the date when full compliance was achieved is
already adequately addressed in Inspection Report 150-00033/03-001.
However, you are required to submit a written statement or explanation
pursuant to 10 CFR 2.201 if the description therein does not
accurately reflect your corrective actions or your position. In that case,
or if you choose to respond, clearly mark your response as a "Reply to
a Notice of Violation," and send it to the U.S. Nuclear Regulatory Commission,
ATTN: Document Control Desk, Washington, DC 20555 with a copy
to the Regional Administrator Region IV, within 30 days of the date
of the letter transmitting this Notice of Violation (Notice).

If you contest this enforcement action, you should also provide a copy
of your response, with the basis for your denial, to the Director, Office
of Enforcement, United States Nuclear Regulatory Commission, Washington,
DC 20555-0001.

If you choose to respond, your response will be made available electronically
for public inspection in the NRC Public Document Room or from the NRC's
document system (ADAMS), accessible from the NRC Web site at http://www.nrc.gov/reading-rm/adams.html.
Therefore, to the extent possible, the response should not include any
personal privacy, proprietary, or safeguards information so that it can
be made available to the Public without redaction.

This report is based on an investigation initiated by the Office of Investigations
(OI), Region IV Field Office on October 28, 2002, to determine if C&J
of Bismarck, North Dakota, violated NRC requirements by conducting radiographic
operations at the Williston Basin Interstate Pipeline Company field location
in Whitewood, South Dakota, an area within NRC jurisdiction, without filing
NRC Form 241, "Report of Proposed Activities in Non-Agreement States,
Areas of Exclusive Federal Jurisdiction, or Offshore Waters.

Program Overview

C&J is authorized under a General License pursuant to 10 CFR 150.20
to use byproduct material for industrial radiography. This nondestructive
testing company is authorized to use licensed material at temporary
jobsites in areas of NRC jurisdiction provided that the requirements
of 10 CFR 150.20 are met.

Details of Investigation

Based on interviews and the review of documentary evidence developed
during the investigation, it was determined that on September 5, 2002,
C&J conducted radiographic operations at the Williston Basin Interstate
Pipeline Company field location in Whitewood, South Dakota, prior to
filing NRC Form 241, "Report of Proposed Activities in Non-Agreement
States, Areas of Exclusive Federal Jurisdiction, or Offshore Waters."
This was identified as an apparent violation of 10 CFR 150.20 (Section
2).

Corrective Actions

Corrective actions initiated by the licensee included filing NRC Form
241 upon the realization they had failed to file, and changing company
procedures by carrying to each jobsite, additional NRC Form 241s so
that C&J can file from any location prior to conducting radiographic
operations.

Report Details

1 Program Overview

1.1 Scope

C&J is authorized under a General License pursuant to 10
CFR 150.20 to use byproduct material for industrial radiography. This
nondestructive testing company is authorized to use licensed material
at temporary jobsites in areas of NRC jurisdiction provided that the requirements
of 10 CFR 150.20 are met.

2 Details of Investigation

2.1 Investigation Scope

The investigation was initiated by the NRC's Office of Investigations
(OI), on October 28, 2002, to determine if C&J of Bismarck, North
Dakota, violated NRC requirements by conducting radiographic operations
at the Williston Basin Interstate Pipeline Company field location in Whitewood,
South Dakota, an area within NRC jurisdiction, without filing NRC Form
241, "Report of Proposed Activities in Non-Agreement States, Areas of
Exclusive Federal Jurisdiction, or Offshore Waters." The investigation
consisted of interviews with C&J senior management and contractor
personnel.

2.2 Interview with C&J Company President

10 CFR 150.20(a) provides, in part, that any person who holds
a specific license from an Agreement State is granted an NRC general license
to conduct the same activity in Non-Agreement States, provided that the
provisions of 10 CFR 150.20(b) have been met.

10 CFR 150.20(b)(1) requires, in part, that any person
engaging in activities in Non-Agreement States, shall, at least 3 days
before engaging in each such activity, file an NRC Form 241, "Report
of Proposed Activities in Non-Agreement States," with the Regional Administrator
of the appropriate NRC regional office.

During an interview conducted by the investigator, the president
of C&J indicated that most of the company's work is performed within
the State of North Dakota and most of that work is contracted by Williston
Basin Interstate Pipeline Company of Baker, Montana (Williston). The president
added that having worked in the radiography industry for many years, he
was familiar with reciprocity requirements, however, due to the potential
for not performing any work annually in NRC jurisdiction, he opted to
wait until a job in NRC jurisdiction became available before filing NRC
Form 241 and paying the associated fees.

On September 5, 2003, the president and his wife were performing
radiography at a jobsite in North Dakota for Williston when their Williston
contact telephoned them and asked them to travel to another Williston
jobsite in South Dakota to perform radiography. Since they were already
away from their home office, they decided to travel directly to the South
Dakota project. It was not until about 4 weeks after C&J had completed
the job in South Dakota that they realized the failure to file the NRC
Form 241. When C&J realized this, the president mailed NRC Form 241
and the associated fees to NRC Region IV. The Form 241 was received in
Region IV on October 8, 2002.

The failure to file NRC Form 241, "Report of Proposed Activities
in Non-Agreement States, Areas of Exclusive Federal Jurisdiction, or Offshore
Waters" prior to beginning radiographic operations in NRC jurisdiction
was identified as an apparent violation of 10 CFR 150.20 (150-00033/0002-01).

3 Corrective Actions

Corrective actions included filing NRC Form 241 upon the realization
they had failed to file, and changing company procedures by carrying to
each jobsite, additional NRC Form 241s so that C&J can file from any
location prior to conducting radiographic operations.

4 Exit Meeting Summary

On April 23, 2003, a final telephonic exit briefing was held
with the president of C&J to review the findings as presented in this
report. Licensee representatives acknowledged the findings. No proprietary
information was identified.

ATTACHMENT

PARTIAL LIST OF PERSONS CONTACTED

Licensee

Charles Schaan, President and Radiographer
June Schaan, Radiographer's Assistant

ITEMS OPENED, CLOSED, AND DISCUSSED

Opened

150-00033/0002-01

VIO

An apparent violation involving the failure to file
NRC Form 241, "Report of Proposed Activities in Non-Agreement States,
Areas of Exclusive Federal Jurisdiction, or Offshore Waters" prior
to the performance of radiographic operations in areas of NRC jurisdiction.